Move towards marginal cost pricing in electricity

Book · Thu Jan 01 04:00:00 EST 1976

OSTI ID:7337033

Acton, J P

The movement towards electric rate reform is reviewed by the Rand Corporation to determine the relationship between recent changes in electricity demand, the need for rate reform, and the basic process of pricing. Electricity rates, originally set to encourage consumption, have seen consumption grow dramatically along with the mix of appliances and equipment. Other changes result from a higher cost to generate electricity, an awareness of European true cost pricing, and conservation efforts. Rates based on marginal cost are appropriate and can be administered. Prices set to serve as signals allow customers to adjust their consumption and promote more efficient use of electricity. Rand concludes that it is important to make a commitment to a pricing policy and let government agencies, utilities, and customers all participate in planning a transition. Specific conclusions are that large customers with meters already in place can begin immediately to use marginal cost or time of day pricing. Based on their success, an optional or mandatory program can be set for intermediate users. Extension to residential and commercial customers should wait for trial and demonstration results to see if the costs of metering and administration are prohibitive. (DCK)

• OSTI ID: 7337033
• Country of Publication: United States
• Language: English

Related Subjects

20 FOSSIL-FUELED POWER PLANTS
200106 -- Fossil-Fueled Power Plants-- Economics
29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
296000* -- Energy Planning & Policy-- Electric Power
BUILDINGS
CHARGES
COMMERCIAL BUILDINGS
CONSUMPTION RATES
COST
DEMAND FACTORS
ECONOMICS
EFFICIENCY
ELECTRIC POWER
ENERGY CONSERVATION
ENVIRONMENTAL EFFECTS
INDUSTRY
LOAD MANAGEMENT
MANAGEMENT
MEASURING METHODS
POWER
PUBLIC RELATIONS
PUBLIC UTILITIES
RESIDENTIAL SECTOR